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Farm Bill; Appropriations; Wheat; and, the Ag Economy

Farm Bill- Senate Focus

Yesterday evening, Senate Majority Leader Harry Reid (D., Nev.) filed cloture on the Farm Bill (S.954).  A cloture vote has been set for 10 a.m. on Thursday, June 6.

The Senate will not be in session on Wednesday as memorial observances for the Honorable Frank R. Lautenberg, the late Senator from the State of New Jersey take place.

Erik Wasson reported yesterday at The Hill’s On the Money blog that, “[The cloture motion (60-vote threshold)] would create a Monday final vote on the farm bill…”

And David Rogers pointed out yesterday at Politico that, “Cloture is always a challenge, but having been through a lengthy amendment process in the last Congress, Stabenow has tried to save time — and win support — by including virtually all the major substantive provisions adopted by the Senate in floor debate a year ago.”

Earlier yesterday, Leader Reid indicated that, “This week work continues on an agriculture bill that will create jobs, cut taxpayer subsidies and reduce the deficit. Chairman Stabenow and Ranking Member Cochran have done exceptional work managing this bill. They made excellent progress, processing amendments. I will give the managers as much time as I can to reach an agreement to consider a finite list of amendments to the farm bill. And I hope I will not have to file cloture on this legislation tonight.

But we need to move forward. It is important to leave ample time for debate on the bipartisan immigration bill reported by the Judiciary Committee last month. And the Senate must move before the end of June to protect students from the rising cost of education and keep loan rates low.”

Several attempts were made yesterday afternoon to bring up amendments on the Farm Bill; however, objections were made on each one of them.

An update posted yesterday at the Senate Democrats Online explained that, “This afternoon, there were multiple requests for additional amendments to be called up to S.954, the Farm bill.  None of the amendments received the consent necessary.”

Yesterday’s update proceeded to provide details on each amendment request.

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Senators finally came to the floor in the afternoon to highlight some of the gridlock problems on amendments. Sen. John McCain, R-Ariz., attempted to offer an amendment, but drew an objection from [Sen. Mary Landrieu (D., La.)] before he could explain the provision. Landrieu then said she was upset Sen. Pat Toomey, R-Pa., had put a hold on an amendment on flood insurance she and cosponsors had tried to attach to the Water Resources Development bill, and now Landrieu wants to bring up that amendment on the farm bill. Landrieu’s amendment would grandfather in current flood-insurance rates to avoid rate increases until an affordability study is done.

‘‘I’m not trying to stop anything,’ Landrieu said. ‘I’m just trying to advance a vote on flood insurance.’

Because her amendment was blocked, Landrieu said she would in turn then block every Republican amendment on the farm bill”  [video replay of a portion of this exchange is available here].

Mr. Clayton noted that, “Sen. Tom Coburn, R-Okla., then began to offer a list of amendments and Landrieu followed through to stop Coburn’s amendments from being debated. Coburn said he sympathizes with Landrieu’s situation. Coburn said the problem with the Senate now is that too many senators are too cowardly to debate and vote on amendments or take a stand on a position.

“‘We’ve unwound because we don’t want to have real debates and real votes,’ Coburn said.

Stabenow came to the floor to acknowledge there were still problems getting a final, universal list of amendments to debate. She said ideally, even if the cloture vote moves ahead, there would be a final list of amendments to debate.”

Niels Lesniewski reported yesterday at Roll Call Online that, “Sen. Tom Coburn, R-Okla., made a series of requests to get a slew of farm bill amendments called up and pending for votes, but faced objection. At one point, Agriculture Chairwoman Debbie Stabenow of Michigan actually called out Coburn for trying to offer an amendment that had already been included in her bill.

“By and large, Stabenow and ranking member Thad Cochran, R-Miss., included amendments adopted during last year’s farm bill marathon that included 73 votes.”

The Roll Call item added that, “‘We don’t at this point have time to go through 150 amendments, so what we’ve got to do is find out what is a priority for everyone, put together a finite list, we’re going to continue to work on that,’ Stabenow said.”

In remarks on the Farm Bill yesterday morning on the Senate floor, Chairwoman Stabenow noted that, “Let me remind colleagues again that we—a year ago, most of us [were] here at that time—a year ago we worked very hard.  In fact, other than the budget resolution, I think we may have the record for most amendments that were voted on on a piece of legislation.  I don’t know that for sure, but I think it rates right up there.” (video replay of Chairwoman Stabenow’s floor presentation available here).

An editorial update this week at The Hill Online stated that, “The road to President Obama’s desk will be bumpy for the farm bill, but Stabenow’s aggressive push has improved its chances.”

Meanwhile, an update today by Lewis Bollard at The Hill’s Congress Blog indicated that, “It’s not often that the National Pork Producers Council and People for the Ethical Treatment of Animals agree on anything. But both are opposing an amendment that Sen. Diane Feinstein (D-Calif.) will offer to the Farm Bill. The amendment would set basic national standards for egg production—standards that the pork producers think go to far, and PETA thinks don’t go far enough.

“Their opposition is all the more reason to pass the amendment. The amendment is a rarity in the current Congress: a bipartisan compromise that proposes moderate reforms. It’s no surprise that extremists on both sides feel threatened.

Feinstein’s amendment simply requires that egg laying hens have enough space to perch, nest, flap their wings, and express other natural behaviors. It bans ‘molting’—starving hens to induce growth—and sets ammonia standards in henhouses to protect animals and farmworkers. It introduces clear production-method labels, so consumers know what they’re buying. And it gives farmers 15-18 years to adapt their cages, plus a uniform national standard so they can invest in new henhouses.”

In other developments, Reuters writer Charles Abbott reported this week that, “Food manufacturers and big sugar buyers said on Monday they believe a proposed U.S. sugar-to-ethanol program will cost twice as much as a government estimate and urged congress to repeal it as part of broader changes in sugar policy.

“The program, which would allow the government to buy excess sugar and sell it to biofuel manufacturers, stands to cost the U.S. government $100 million in the fiscal year through October 1, said Agralytica food policy consultant Tom Earley on behalf of the Coalition for Sugar Reform. That would be roughly double the Congressional Budget Office’s baseline estimate of $51 million.”

And from a political perspective, Alexander Bolton reported yesterday at The Hill Online that, “Senate Democrats hope to pass a five-year farm bill this week and bolster their appeal with rural voters, who they see as crucial to retaining their majority in 2014.”

Mr. Bolton explained that, “Agriculture is a major industry in Montana, South Dakota, Arkansas and North Carolina, four states that are huge GOP targets next year. Montana and South Dakota are open seats following the announced retirements of Sens. Max Baucus (D-Mont.) and Tim Johnson (D-S.D.). Meanwhile, Sens. Mark Pryor (D-Ark.) and Kay Hagan (D-N.C.) are two of the chamber’s most vulnerable incumbents.

“Other rural states where Democrats face competitive races are Alaska, Louisiana, New Hampshire and West Virginia.”

In an international context, an article by Paige McClanahan, which was posted yesterday at The Guardian Online (“US farm bill promises reduced cotton subsidies as Brazil pressure pays off”) noted that: “Proposed changes set to benefit cotton farmers in poor countries and ease trade distortion that almost led to Brazilian sanctions.”


Farm Bill- House Focus

Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “House Agriculture Committee Ranking Member Collin Peterson grabbed some attention Monday when he suggested to National Grange members that the current farm bill being debated in Congress could be the last.

“In a phone interview Tuesday, the Minnesota Democrat said he has explained in the past that farm and nutrition policy could largely operate on cruise control if the safety net were shifted more to crop insurance.”

Mr. Clayton indicated that, “‘This is not something new. I’ve been saying this since I was chairman,’ Peterson said. ‘I said when I was chairman that in five years we might only have crop insurance, maybe 10 years.’

Peterson explained crop insurance doesn’t need a farm bill because it’s permanently authorized. Until 2008, crop insurance wasn’t even part of the farm bill, but handled in separate legislation. The Supplemental Nutrition Assistance Program also has permanent authorization. Some of the major conservation programs also have permanent authorization, Peterson said.

“‘So, given the difficulty we are having here, I can see the scenario where we just don’t get it done,’ he said.”

The DTN update added that, “Peterson noted the farm bill didn’t help former Sen. Blanche Lincoln of Arkansas, who lost re-election in 2010 despite being chairwoman of the Senate Agriculture Committee and being a strong advocate for southern farmers.

“While Peterson said he hasn’t gotten a firm date on when the farm bill will come to the floor, the speculation around Washington aggies is that the House will debate the bill the week of June 17. Peterson said passage becomes more difficult if legislation doesn’t get passed before the August break. ‘If we don’t get the bill done this summer or early this fall, if we get into next year it’s going to be very difficult to get it done in an election year,’ he said.”

With respect to the SNAP program Rep. Barbara Lee (D., Calif.) noted on Tuesday that, “The [Farm Bill] reauthorization includes more than $20 billion in harmful and fiscally irresponsible cuts to the food stamp program, our Nation’s first line of defense against hunger. Not only is cutting SNAP morally wrong, it’s economically bankrupt. Cuts to nutrition programs will cost the government more money in the long run, but also it is just probably the worst thing that I have ever seen proposed.”  (Congressional Record, June 3, at page H3008).

Tom Wright-Piersanti reported earlier this week at The Star-Ledger (Newark) Online that, “This month, the House is expected to bring the [Farm] bill to the floor. The current version would cut SNAP by almost $21 billion and remove nearly 2 million people who are eligible from the program, [Rep.  Donald Payne Jr. (D., N.J.)] said. About 200,000 children would be automatically removed from the associated free school lunch program as a result.

“‘Twenty-one billion dollars coming out of this program is unconscionable. I am here to say that I will not support it, and I will continue to fight for programs that help families every single day survive in this nation,’ Payne said.”

In other news, the House Committee on the Judiciary will hold a hearing this afternoon on the Farm Bill.


Appropriations- Budget

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “The House voted Tuesday afternoon to ‘deem’ the GOP budget approved by Congress in order to begin working on spending bills.”

More broadly on the appropriations process, David Hawkings noted yesterday at Roll Call Online that, “The House is moving ahead with its plan to pass the year’s first two spending bills before going home for the weekend Thursday afternoon. There’s bipartisan agreement, albeit for different reasons, to ignore President Barack Obama’s warning that lawmakers are wasting valuable legislative time.

“The White House made its first symbolically important move in the 2014 appropriations game Monday, declaring the president would veto any measure that would carry out the stated aspirations of the majority Republicans in the House.”

Mr. Hawkings indicated that, “The GOP’s opening gambit, in turn, is to write a dozen bills that would essentially cancel next year’s sequester cuts for national security enterprises and come up with the necessary money by imposing deeper-than-sequester cuts on social and domestic programs.

The administration says the whole annual appropriations process should be put on hold until the GOP House and Democratic Senate settle on an overarching budget blueprint that would turn off the sequester altogether, presumably with some combination of entitlement curbs and revenue enhancements. But, daily posturing on both sides notwithstanding, that’s nowhere close to happening.”

And with respect to agriculture, an update yesterday from the House Appropriations Committee stated that, “The House Appropriations Committee today released the fiscal year 2014 Agriculture Appropriations bill, which will be considered in subcommittee [Wednesday].

David Rogers reported yesterday at Politico that, “House Republicans rolled out a $19.5 billion agriculture spending bill Tuesday that deals back-to-back blows to President Barack Obama’s reform agenda for food aid overseas and the financial markets at home.

“An estimated $1.15 billion is provided for the Food for Peace program, $284 million less than was enacted this spring and with none of the changes that Obama wanted to allow the purchase of more food overseas.

“At the same time, the Commodity Futures Trading Commission is effectively frozen at its current operating budget of $195 million reflecting the March sequester. That is $10 million below the level set in the continuing resolution this spring and represents a nearly 40 percent cut from Obama’s 2014 budget request.”

An update yesterday at the National Sustainable Agriculture Coalition Blog stated that, “On Tuesday, June 4, more than 25 national conservation organizations delivered a letter to House Appropriators opposing the practice of cutting mandatory conservation program funding in annual appropriations bills.”

In a separate article posted yesterday at Politico, David Rogers reported that, “Fearful of anything that even looks like Dodd-Frank, House Republicans want to block a modest federal rule giving farmers and ranchers a greater say on salary increases for senior officers in the banks and co-ops that make up the Farm Credit System.”

The article noted that, “[T]he rule has been met by strong opposition from the well-connected Farm Credit Council, the Washington-based trade organization representing the lenders in the farm credit network. And it echoes enough of the 2010 Dodd-Frank financial reforms that Rep. Robert Aderholt (R-Ala.) has drawn a sharp line in his draft 2014 budget for the Agriculture Department and related agencies like FCA.

That bill was released Tuesday and includes language which specifically denies funding for the FCA to implement the ‘say-on-pay’ rule. The measure is likely to win quick approval Wednesday morning from the House Appropriations agriculture subcommittee, which Aderholt chairs. But it will face more scrutiny when it comes before the full Appropriations Committee later this month.”


GMO Wheat Issues

Reuters writer Charles Abbott reported yesterday that, “The U.S. government is working with private companies to develop a rapid test for genetically modified wheat in response to fears about an unapproved wheat strain, said Agriculture Secretary Tom Vilsack on Tuesday.

“Buyers in Asia and Europe have shunned U.S. wheat since USDA announced last week that a strain of wheat, modified by Monsanto Co for herbicide tolerance, was found in an Oregon field. Genetically modified wheat is not approved for cultivation anywhere in the world.”

Bloomberg writer Alan Bjerga reported yesterday that, “Tests of U.S. wheat imported by Japan, South Korea and the European Union have found no evidence of the unapproved gene-altered strain discovered in Oregon in April, Agriculture Secretary Tom Vilsack said.”

Mr. Bjerga indicated that, “Monsanto said in a posting on its corporate blog today that it gave the USDA and U.S. trading partners a testing method to distinguish the wheat trait developed to resist the company’s Roundup herbicide from varieties approved for planting and consumption.”

And the Bloomberg article added that, “Ernest Barnes, a Kansas wheat farmer, yesterday sued Monsanto in federal court in Wichita seeking at least $100,000 in damages for lower wheat prices triggered by the export limits. Monsanto tested genetically modified wheat ‘knowing full well that release of its experimental seeds into the general wheat population could result in the loss of huge domestic and export markets,’ according to a copy of the complaint provided by the farmer’s lawyer.”


Agricultural Economy

AP writer David Pitt reported yesterday that, “It’s decision time for many Midwest corn farmers stuck in one of the wettest springs ever: Plant late in ground that’s been too wet, replant corn in muddy fields or collect crop insurance.”

The AP article noted that, “If the skies clear and the growing season is favorable, it’s still possible to have an abundant corn harvest, which would help moderate price swings and keep food and beverage prices steady. So far, weather concerns have driven corn prices up nearly 10 percent in the past week and a half…[O]ne of the biggest worries now is that the rain will stop and drought will set in again. It didn’t emerge last year until June.”

Meanwhile, University of Illinois Agricultural Economist Gary Schnitkey indicated yesterday at the farmdoc daily blog (“Non-land Costs Continue to Increase”) that, “Non-land costs continued to increase in 2012. Data from Illinois Farm Business Farm Management indicate that non-land costs in central Illinois on high-productivity farmland averaged $581 per acre for corn in 2012, up $78 per acre from non-land costs in 2011. Non-land cost for soybeans averaged $353 per acre, up $50 per acre in 2011. Non-land costs in 2012 represent record high levels for both corn and soybeans” [see related graph].

Keith Good